The Effect of Relative Performance Information on Effort Allocation and Performance in a Multi-Task Environment

2010 ◽  
Author(s):  
R. Lynn Hannan ◽  
Gregory P. McPhee ◽  
Andrew H. Newman ◽  
Ivo Tafkov
Keyword(s):  
Relative Performance ◽  
Task Environment ◽  
Performance Information ◽  
Effort Allocation ◽  
Relative Performance Information ◽  
And Performance

The Effect of Relative Performance Information on Performance and Effort Allocation in a Multi-Task Environment

2012 ◽  
Vol 88 (2) ◽  
pp. 553-575 ◽  
Author(s):  
R. Lynn Hannan ◽  
Gregory P. McPhee ◽  
Andrew H. Newman ◽  
Ivo D. Tafkov
Keyword(s):  
Employee Performance ◽  
Relative Performance ◽  
Data Availability ◽  
Task Environment ◽  
Performance Information ◽  
Behavioral Theories ◽  
The Social ◽  
Distortion Effect ◽  
Relative Performance Information ◽  
Motivation Effect

ABSTRACT This study investigates how relative performance information (RPI) affects employee performance and allocation of effort across tasks in a multi-task environment. Based on behavioral theories, we predict that the social comparison process inherent in RPI induces both a motivation effect that results in increased effort as well as an effort distortion effect that results in the distortion of effort allocations across tasks away from the firm-preferred allocations. We also predict that both effects are magnified when the RPI is public compared to private. We argue that although the motivation effect will generally benefit performance, the effort distortion effect may be detrimental to performance. We design an experiment that isolates these two effects. Consistent with our predictions, we find that RPI induces both motivation and effort distortion effects and that both effects are magnified when the RPI is public rather than private. Although the motivation effect increases performance, we demonstrate that the effort distortion effect can decrease performance. By isolating the motivation and effort distortion effects, our study provides insights into the costs and benefits of RPI in a multi-task environment. As such, it informs accountants regarding the design of information systems and when tasks should be aggregated or disaggregated across employees. Data Availability: Data are available from the authors upon request.

Assigned versus Chosen Relative Performance Information: The Effect of Feedback Frequency on Performance

2020 ◽  
Vol 32 (1) ◽  
pp. 137-158
Author(s):  
D. Kip Holderness ◽  
Kari Joseph Olsen ◽  
Todd A. Thornock
Keyword(s):  
Relative Performance ◽  
Data Availability ◽  
Performance Information ◽  
Short Term ◽  
Subsequent Performance ◽  
Negative Effect ◽  
Relative Performance Information ◽  
And Performance ◽  
Feedback Frequency

ABSTRACT Technological advancements have greatly improved the ability to provide relative performance information (RPI), including information systems capable of providing feedback on demand. We use an experiment to examine the effect of RPI feedback frequency on task performance when RPI is assigned by managers and when RPI is solicited by employees. When RPI is assigned to employees, we hypothesize and find a non-linear relationship between RPI frequency and performance such that an increase in frequency first increases and then decreases performance. In contrast, we hypothesize and find that when RPI is chosen by employees, the negative effect of highly frequent RPI on performance is not only mitigated, but reversed, due to individuals placing greater weight on chosen feedback than assigned feedback. We also find that when individuals choose to view RPI feedback, strategic effort (i.e., expending short-term resources for long-term benefits) mediates the relation between viewing RPI and subsequent performance. JEL Classifications: M10; M40; M41. Data Availability: Data available upon request.

How relative performance information affects employee behavior: a systematic review of empirical research

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Christian Schnieder
Keyword(s):  
Organizational Performance ◽  
Relative Performance ◽  
Empirical Literature ◽  
Future Research ◽  
Employee Behavior ◽  
Performance Information ◽  
Systematic Analysis ◽  
Content Type ◽  
Relative Performance Information ◽  
And Performance

PurposeThis paper provides an overview of the empirical findings on how relative performance information (RPI) affects employee behavior. Additionally, the review identifies future research opportunities based on a systematic analysis of the literature that incorporates findings across several disciplines and provides replicable, extensive coverage.Design/methodology/approachThis paper addresses a research gap via synthesis, drawing on the empirical literature identified and analyzed systematically. A conceptual framework is developed to integrate the studies.FindingsThe effect of RPI on performance through enhanced effort is positive; moreover, publicity and performance-dependent compensation strengthen the effect. However, RPI has also been found to increase sabotage among employees, and it can lead to less honest reporting. Future research could examine critical mediators and moderators of the RPI-performance relationship and thus complement the findings. Additionally, the effects of group-based RPI remain underrepresented. Future work could help to assess in greater detail how RPI interacts with culture and norms and whether RPI is due to personal expectations. There is also room for further research regarding the effects of RPI on cooperation, its consequences for learning, how it affects budgeting decisions and its implications for risk taking.Originality/valueThis paper presents the first literature review in the field of RPI. It provides synthesized knowledge about whether RPI is beneficial or detrimental to organizational performance.

The Informativeness of Relative Performance Information and Its Effect on Effort Allocation in a Multitask Environment

2019 ◽  
Vol 36 (3) ◽  
pp. 1607-1633 ◽  
Author(s):  
R. Lynn Hannan ◽  
Gregory P. McPhee ◽  
Andrew H. Newman ◽  
Ivo D. Tafkov ◽  
Steven J. Kachelmeier
Keyword(s):  
Relative Performance ◽  
Performance Information ◽  
Effort Allocation ◽  
Relative Performance Information
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